Boom No Boon To Taxpayers Downtown Growth Not Lowering Orlando Taxes

To the people who decide how Orlando spends its money, the refurbished shops and new highrises in downtown signify more than the rejuvenation of the center city.

They mean money.

The value of assessed property in the downtown core -- $136.5 million in 1981 -- has increased nearly fourfold in the past six years to $474.6 million. To homeowners and other city property owners, that should mean lower tax bills. Theoretically, a healthy tax roll of downtown commercial property means more money in the city treasury from the heart of the business district, and less demand for taxes on others to pay for services in the sprawling neighborhoods and business areas.

But the theory takes a few twists in Orlando.

A special taxing formula adopted 5 1/2 years ago to promote private investment in downtown is the reason. Under the formula, all money from property taxes on downtown development and higher assessments since 1981 -- money that normally would go into the general fund budget to pay for typical city operations -- is funneled into a special fund to improve downtown.

Taxes collected by Orange County and the special taxing district of the Orlando Downtown Development Board on post-1981 developments also are diverted.

For the coming budget year in Orlando, that means about $1.29 million of the $22 million the city will collect in property taxes cannot be budgeted for police or parks but will be used for such projects as the $89 million arena project, streetscape sidewalk improvements and a subsidized housing project for the elderly.

For routine city services, other Orlando taxpayers have to make up the difference.

In two years, the $1.29 million will grow to about $2.2 million because of Sun Bank Center and duPont Centre. This share of general city taxes going to downtown projects will continue to grow as other downtown projects are completed.

Still, as the council prepares for the first of two budget hearings today at 5 p.m., Mayor Bill Frederick contends that neighborhood and business needs are not being ignored in his 1987-88 spending plan.

SOCIAL SERVICES TO GET A BIGGER CHUNK

During meetings earlier this summer on the $91 million budget, council members agreed to raise spending for social service agencies. They also gave the nod to programs that will involve higher fees for some recreation programs and downtown parking.

At today's hearing the council also will tentatively adopt an $82 million capital improvement budget, paid for mostly with income from state gasoline and sales taxes, service charges, impact fees and revenue bonds. The bulk of that budget -- $49 million -- will go to improve sewage plants, but there also is money for roads to serve the arena, parks, flood control projects and new downtown parking garages.

While most of the spending decisions in the general fund and capital improvement budgets are set, citizens with ideas for spending city money may find welcome ears on the council at the public hearings.

The final one, also at city hall, is scheduled for Sept. 21 at 5 p.m.

The budget, which goes into effect Oct. 1, is based on a tax rate of $4.19 for each $1,000 of assessed taxable property. That's the same tax rate as the current one. For a homeowner living in a $75,000 house with a $25,000 homestead exemption, Orlando taxes in the coming year will be about $210.

Frederick could have proposed ''rolling back'' the tax rate to $3.96 per $1,000 and collected the same amount in property taxes as the city did in 1986-87, but he chose to propose the rate that produces 5.6 percent more property tax money. He has said that next year he may propose the rollback rate.

PRETTY PENNY FOR PARKS, NEIGHBORHOODS

Aside from property taxes, the biggest bulk of the general fund money comes from the city-owned Orlando Utilities Commission. Orlando will receive $18.3 million from OUC in the coming year, 10 percent more than in the current one. Frederick, who is running for re-election in 1988, has called his proposed $91 million general fund budget one of ''implementation.''

''The parks are getting beefed up,'' and there is more money for public safety, he said.

Safety always has been a big-ticket item for Frederick. Of the 41 new positions in the upcoming city budget, 21 will be police: 18 more uniformed officers and three civilians. The fire department, which wanted five more staffers for the communications center and first was rejected, also will have two more employees.

Spending for parks also is up, continuing a trend started in mid-1986, when the city council approved Frederick's request to pump an extra $800,000 into the $4.15 million parks budget. The money was for more staff to plant flowers and keep parks cleaner.